Thursday, December 12, 2013
By BETTINA BOXALL and RONALD D. WHITE Los Angeles Times
LOS ANGELES - Laying the blame for the deaths of 11 rig workers in the Deepwater Horizon explosion and Gulf of Mexico oil spill on BP, federal prosecutors announced Thursday that two BP supervisors have been charged with manslaughter and the company will pay a $4 billion criminal fine, the largest in U.S. history.
Fire boats battle the blazing remnants of the Deepwater Horizon on April 21, 2010, a day after the blowout that resulted in an historic oil spill that gushed for 87 days.
The Associated Press
FINANCIAL FALLOUT OF OIL SPILL IS FAR FROM OVER FOR BP
BP's $4.5 billion settlement of federal criminal charges announced Thursday is a record amount, and a significant sum.
Or, looked at another way, it's less than the $5.5 billion in profit the British oil giant made between June and September of this year.
BP is not fully past the Deepwater Horizon disaster, the 2010 explosion that killed 11 workers and led to the largest oil spill in U.S. history. The company has so far set aside $42 billion to pay fines and damages resulting from the spill, and that amount may grow.
But the company is steadily resolving the spill's legal issues and has nearly met its target for asset sales to help pay for the spill's costs. In the process, BP PLC has reshaped itself into a somewhat smaller company - but one that's still a large and profitable force in the oil industry.
"The danger is not over," Christine Tiscareno an analyst at S&P Capital IQ in London. "But they are now a step closer" to moving beyond the disaster.
The biggest obstacle is a trial set for February in New Orleans to determine BP's civil liability. If a court finds that BP was grossly negligent in causing the spill, fines could be billions more than the company has estimated.
For instance, BP has reserved $3.51 billion for possible civil fines under the Clean Water Act. But a bill signed into law in July by President Barack Obama would allow up to $17.6 billion in civil fines - maybe $21 billion depending on definitions of how much oil actually spilled into the Gulf - said environmental attorneys Jordan Diamond and Jay Austin.
Tiscareno thinks the criminal settlement helps BP argue that it was not grossly negligent. "It adds to their chest of ammunition," she said.
-- The Associated Press
"Those deaths were in fact unnecessary," U.S. Attorney General Eric Holder said in New Orleans, adding that the federal investigation continued into the 2010 Deepwater disaster and the nation's biggest offshore oil spill. "Our work is far from over."
The charges, contained in a criminal settlement with BP and an indictment handed down by a federal grand jury, paint a picture of a corporation that placed "profit over prudence," said Assistant Attorney General Lanny Breuer.
Not only did the BP supervisors on board the rig the night of the explosion fail to take steps necessary to prevent the blowout when they realized they were losing control of the deep sea well, company executive David I. Rainey later lied to Congress about the size and severity of the spill, prosecutors said.
"As part of its plea agreement, BP has admitted that, through Rainey, it withheld documents and provided false and misleading information in response to the U.S. House of Representatives' request for flow-rate information," the Department of Justice said in a news release.
The explosion on the night April 20, 2010, unleashed a gush of oil from broken equipment on the seabed that continued for 87 days off the Louisiana coast. More than 200 million gallons of oil were spilled, shutting down commercial fisheries, destroying the summer beach season along part of the coast and fouling coastal wetlands.
Still to be settled are federal civil claims for the spill's environmental damage that could cost BP billions of dollars more. Justice officials said negotiations with the company had so far failed to produce an agreement that could avert a civil trial scheduled for February.
Also, a federal judge in New Orleans has not yet approved an estimated $7.8 billion settlement with more than 120,000 plaintiffs in a civil suit by fishermen, beachfront property owners and business owners, among others.
As part of BP's settlement of criminal charges, prosecutors said BP had agreed to plead guilty to felony manslaughter, environmental crimes and obstruction of Congress, and would pay the record $4 billion in criminal fines and penalties.
About $2.4 billion of that will go toward environmental restoration in the gulf. The company will pay an additional $525 million civil penalty to the Securities and Exchange Commission for misrepresenting the size of the spill in SEC filings.
Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. -- the highest-ranking BP supervisors onboard that night -- were charged with 11 felony counts of seaman's manslaughter, 11 felony counts of involuntary manslaughter and one violation of the Clean Water Act in a federal indictment unsealed Thursday.
Lawyers for Kaluza blasted the government case. "After nearly three years and tens of millions of dollars in investigation, the government needs a scapegoat," attorneys Shaun Clarke and David Gerger said in a statement. "Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day."
At the height of the spill, then-BP President Tony Hayward was forced to step down, in part for commenting that "I'd like my life back" during the frenetic cleanup period when oil was washing ashore in Louisiana and many livelihoods were in ruins.
In a statement, Bob Dudley, BP's Group Chief Executive, said the company deeply regretted the loss of life. "From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today's resolution with the U.S. government further reflects, we have accepted responsibility for our actions."
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